GBP/USD back to neutral stance – UOB

Strategists at UOB Group have shifted the outlook on GBP/USD to neutral from bullish, now pointing to further rangebound between 1.2250 and 1.2550.

Key Quotes

“The 1.2430 target indicated yesterday was exceeded by a wide margin as GBP dropped to a low of 1.2379. The weak closing suggests further weakness is likely even though the pace of any further decline is expected to be slower. From here, allow for a bounce to 1.2420 but 1.2460 is expected to cap for a move lower to 1.2350”.

“The expectation for the recent GBP strength to extend further to 1.2620/25 was proven wrong with the breach of the key 1.2400 level yesterday. The 1.2558 high seen last Friday is viewed as a short-term top. The current movement is deemed as the start of a consolidation phase, likely within a broad 1.2250/1.2550 range”.

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